The re-emerging discussions about how XRP could replace the centuries-old networks that financial institutions and banks have relied on to transfer data and money are once again capturing the attention of fintech enthusiasts. XRP’s potential to replace SWIFT is under evaluation, and bulls believe such an achievement could send XRP’s price to over $3 per token. Chances are that XRP’s price will improve, making converting XRP to USD more profitable than it is now, should this supposition come to pass. But there’s more to this than the pure art of speculation guessed right – such a significant change would have just as significant implications for all participants in the financial space, whether institutional or retail – likely for the better.
There’s a reason why the XRP Ledger is the contender we’re talking about: it already facilitates rapid transactions for a fraction of the cost involved in traditional transactions involving SWIFT.
XRP, competing against or collaborating with SWIFT?
The tea has long been that XRP wants to replace SWIFT, supporting the daily international money transactions occurring. It takes pride in being time-efficient, cost-effective, and secure, and can be used as a means of payment outside the banking system’s control. The blockchain-built XRP Ledger, abbreviated XRPL, would facilitate transactions with the XRP token as the bridge currency in this scenario.
The main benefits cited include slashed transaction costs and near-instant settlement; however, the fact that numerous other blockchains offer instant settlement and lower costs does not favor Ripple’s mission. What’s happening right now is a communal effort to converge the practicalities of both systems to elevate the entire process of message and money transfer at scale.
Could XRP hold onto an idealistic dream?
Experts argue that while XRP and SWIFT can converge to streamline cross-border transfers, the former isn’t the most viable solution to replace SWIFT, which is understandable. It’s not a stable and predictable enough of a currency, and this would be just the surface-level reason why worrying about such a global transformation shouldn’t be on your to-do list right now. The interesting thing, in fact, is that SWIFT has made public its decision to integrate blockchain technology into its procedures, implementing the open and international standard ISO 20022 for the transmission of financial messages.
SWIFT doesn’t plan to issue any cryptocurrency, according to its latest statements, so there’s no token to compete with XRP. Even more, SWIFT reportedly uses Chainlink’s solution to enable over 11,500 member banks to access private and public distributed ledgers. The extent to which SWIFT has gone to modernize the network is indicative of the commitment to technological evolution. SWIFT now works with smart contract platforms and tokenized assets while maintaining its existing international banking collaborations.
Why XRP?
The choice of XRP and BTC over other cryptos, including Solana and Ethereum, is mainly driven by the projects’ scalability and speed. Bitcoin transactions are known to be pricey, so XRP is a sounder option. Bitcoin isn’t just criticized for priciness, but also for the detrimental impact mining blocks has on the environment, as well as for its speculative character. Ethereum, on the other hand, faces high transaction fees and persistent network bottlenecks.
By comparison, XRP combines scalability, speed, regulatory compliance, and adherence to financial standards such as ISO 20022, making it a top choice for institutional finance.
Volante’s interoperability solution links SWIFT and XRP capabilities
Recent news highlights how XRP and SWIFT can work together on an interoperability basis and make for a solid breakthrough in bridging blockchain and conventional banking infrastructures. Volante Technologies, more exactly, has unveiled a system designed to connect the SWIFT network and XRP Ledger and allow banks to leverage both without disrupting their current operations. Basically, Volante’s setup allows banks to plug blockchain capabilities straight into their current infrastructure without overhauling their internal systems. This integration means that financial institutions could use XRP for settlement while keeping SWIFT for value transfer and messaging, thus building a hybrid model that preserves existing workflows while enabling the use of blockchain’s efficiency. This approach isn’t your usual “XRP replaces SWIFT” narrative – it focuses on interoperability and how banks willing to continue using legacy systems can adopt blockchain more easily and efficiently to their benefit.
A bridge like Volante’s could significantly increase XRP’s utility in real-world banking if implemented on a large scale, and enable faster, lower-cost cross-border payments and potentially capture a share of the trillions of dollars that SWIFT processes annually. However, there are a few challenges that remain, like the fact that widespread adoption will depend on regulatory clarity and sufficient XRP liquidity. In some leading countries in blockchain and crypto, the regulation becomes clearer – see the case of the U.S. and the interpretive letter No. 1186.
Banks to possess crypto to pay for gas fees
The U.S. OCC has greenlit banks using blockchain to pay transaction fees, as stated in the interpretive letter No. 1186. Recently launched guidance uses Ethereum as an example – banks that integrate Ethereum blockchain solutions need ETH to pay transaction fees (aka gas fees), so they can hold small amounts of ETH solely for this purpose. This brings a glimpse of hope that early adopters will set positive examples for future-looking banking systems, though more time is needed for the broader framework to take shape.
SWIFT could integrate blockchain
SWIFT itself has shown openness to embrace innovation and modernize internally; the network is upgrading its messaging standards to meet ISO 20022 standards, which many blockchain systems, including XRP, are already compatible with. Moreover, the global messaging network has begun experimenting with blockchain connectivity in an effort to enable banks to interact with tokenized assets without abandoning the network they’ve been using for decades.
Simply put, SWIFT is integrating blockchain, XRP included. It’s not about replacement but about making the best of both worlds. Companies like Revolut offer positive examples, accelerating innovation by teaming up with Ripple, the company behind XRP, and demonstrating that the pace of blockchain adoption in mainstream finance is quickening.
Concluding words
The idea that XRP could just replace SWIFT is far-fetched, but the roles of XRP Ledger and Ripple Ledger in the future of global finance are undeniable. Stay close to see how crypto keeps reshaping how the world approaches money, because the arena is constantly changing and nothing can predict where the landscape will be in, say, a decade.
